Home » Below’s what 12 ECB participants stated regarding rates of interest today

Below’s what 12 ECB participants stated regarding rates of interest today

by addisurbane.com


A sculpture of the Euro money stands in the city centre of Frankfurt am Key, western Germany, on January 25, 2024.

Kirill Kudryavtsev|Afp|Getty Images

A host of financial experts and financial policymakers collected in New york city today for the International Monetary Fund’s Springtime Conferences â $” consisting of many decision-makers from the European Reserve Bank.

CNBC spoke with 12 participants of the ECB’s Governing Council at the occasion to unload their most current sights on the rate of interest overview and inflationary stress, after euro area cost increases cooled down to 2.4% in March.

The ECB decided to hold prices consistent in April and following fulfills to elect on financial plan on June 6.

Christine Lagarde, head of state of the ECB

ECB President Christine Lagarde: EU growth will come from wage increases while inflation falls

François Villeroy de Galhau, governor of the Bank of France

Watch CNBC's full interview with Bank of France Governor François Villeroy de Galhau

Joachim Nagel, president of Germany’s Bundesbank

Watch CNBC's full interview with German central bank chief Joachim Nagel

Robert Holzmann, governor of the Austrian Central Bank

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Mario Centeno, governor of the Bank of Portugal

For Centeno, a more dovish member, it is “about time to change this monetary policy cycle” given the recent slowdown in inflation.

“I’m sure that we will deliver the response that is consistent with the recovery of the euro area economy that we have in our forecast,” Centeno said, adding that market expectations for June were “very clear.”

Watch CNBC's full interview with ECB policymaker Mario Centeno

Gabriel Makhlouf, governor of the Central Bank of Ireland

Makhlouf said the most recent data sets had shifted his view on rates. Before Christmas he was not even ready to rule out further hikes.

The ECB concluded its run of 10 consecutive rate hikes in September, when it brought its key rate to a record 4%.

“I think we’ve now over the last few weeks seen enough data to say that we’ve reached the top of the ladder, and at our last meeting, from my perspective, we’ve got greater confidence that we can start to reduce the tightening in our monetary policy stance,” Makhlouf said.

ECB's Makhlouf: Expect a change in rates in June in the absence of shocks

Pierre Wunsch, governor of the National Bank of Belgium

“We would really need bad news for not cutting in June,” Wunsch told CNBC, referring to two surprisingly negative inflation prints or oil prices spiking. ECB staff projections, wage data and the rate of services inflation will also be crucial, he said.

Regarding a potential follow-up cut in July, Wunsch said he would be “on the cautious side.”

Watch CNBC's full interview with the Belgium central bank governor

Boris Vujčić, governor of the Croatian National Bank

ECB's Boris Vujčić: We will 'run our policy independently of the Fed'

Gediminas Å imkus, governor of the Bank of Lithuania

Å imkus also emphasized differences between inflation in the U.S. and Europe, with the former driven by fiscal policy along with commodities, and the latter centered on energy and food.

“We don’t follow the Fed… and now the ECB will be the central bank to be followed,” Å imkus said. This is despite the potential global knock-on effects of a stronger dollar due to higher for longer rates in the U.S., he said.

Å imkus added that his current baseline was for “about three” rate cuts this year.

ECB policymaker says he's expecting 'about three' interest rate cuts this year

Edward Scicluna, governor of the Central Bank of Malta

Scicluna said the background of a “very weak economy, very weak economic growth for the last six quarters” in the euro zone was key to rate decisions. That context is despite divergence between resilience in the services-oriented south and weakness in the more manufacturing-focused north, he said.

“Everything is pointing towards… declining inflation all over, including wages, food, energy and so on,” he said.

“It’s more a question of whether you’re risk averse and scared because of risks that you wait to cut. One could have cut rates way back in March or even April,” he continued, adding that he hoped a majority of Governing Council members would back a June cut.

June is 'most probable' for first interest rate cut, ECB's Scicluna says

Mārtiņš Kazāks, governor of the Bank of Latvia

Kazāks said the ECB could be “confident” the worse was behind it in terms of inflation, despite risks.

Two inflation readings are still due before June, he noted, meaning a cut is not guaranteed — but the “probability is quite high.”

June is 'most probable' for first interest rate cut, ECB's Scicluna says

Olli Rehn, governor of the Bank of Finland

Like other policymakers, Rehn said that it would be appropriate to cut rates in June if inflation continues to stay in line with projections. He flagged tensions in the Middle East as a potential risk.

“So far the escalation has been avoided, and we’ve seen that the market reaction to the events was rather moderate… but there is still a certain risk of escalation,” he said.

ECB's Olli Rehn says geopolitics poses the biggest risk to the rate outlook



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